Orange Earnings: France Maintaining Stable Growth Amid Promotional Activity

Orange S.A., the leading telecommunications operator in France, has demonstrated resilience in its earnings growth despite increased promotional activity in the market. The company's strategic focus on converged services and customer retention, coupled with cost-cutting measures and operational efficiency, has enabled it to maintain stable earnings in the face of intensifying competition.

Orange's first quarter results for 2024 highlighted the company's ability to balance promotional activity and pricing strategies to maintain earnings growth. Despite a €201 million revenue increase (2.1%), driven by retail services growth (+3.2%) and low-margin activity reductions, Orange maintained EBITDAaL growth of 2.3%. This was achieved by disciplined eCAPEX (up 3.1% to €1,384 million), keeping eCAPEX as a percentage of revenues at 14.0%. Additionally, Orange's focus on operational efficiency and cost reduction, as evident in Orange Business' cost reduction plan implementation, further supports this balance.

Orange's African and Middle Eastern operations have also played a significant role in boosting the company's earnings performance. In the first quarter of 2024, Africa & Middle East contributed +11.1% to Orange's total revenue growth, with robust performance in voice services and double-digit increases in mobile data, fixed broadband, Orange Money, and B2B activities. This region has maintained its strong momentum for the fourth consecutive quarter, demonstrating the resilience and growth potential of Orange's operations in these markets.




Orange's pricing strategy and promotional activity in France impact its revenue performance by driving retail services growth and maintaining market leadership. The company's value-oriented strategy has led to increases across all Average Revenue Per User (ARPOs) in France. The growth in retail services excluding PSTN contributed to a 0.8% increase in revenues, in line with the "Lead the Future" plan's target of growth between 2.0% and 4.0%. Orange's continued commercial momentum in mobile contracts and very high-speed fixed broadband accesses, along with its leadership position in convergence with 9.1 million convergent customers, has further bolstered its revenue performance. Despite a slight decline in wholesale services due to higher unbundling rates in France, Orange's strong growth in retail services and its robust performance in the Africa & Middle East region have offset this impact, leading to a 2.1% increase in group revenues compared to the first quarter of 2023.

In summary, Orange S.A. has successfully maintained stable earnings growth in France despite increased promotional activity by balancing its promotional strategy and pricing, focusing on converged services and customer retention, and leveraging the growth potential of its African and Middle Eastern operations. As the market continues to evolve, Orange's ability to adapt and innovate will be crucial in sustaining its competitive advantage and delivering value to investors.